Mortgage rates slightly dropped last week

The average mortgage interest rate for a standard 30-year fixed mortgage was 7.10% last week, a decrease of 0.03 percentage points from the previous week’s 7.13%.

Thirty-year fixed mortgages are the most commonly sought out loan term. A 30-year fixed rate mortgage has a lower monthly payment than a 15-year one, but usually has a higher interest rate.

The average mortgage interest rate for a standard 15-year fixed mortgage was 6.64%, with no change from the previous week.

Fifteen-year fixed rate mortgages come with a higher monthly payment compared to its 30-year counterpart.

Usually, however, interest rates are lower and you will pay less total interest because you are paying off your loan at a faster rate.

The average rate on a 5/1 adjustable rate mortgage (ARM) is 6.82%, an increase of 0.26 percentage points from the previous week’s 6.56%.

With an ARM, you will most often get a lower interest rate than a fixed mortgage for say, the first five years.

But you could end up paying more or less after that time depending on your loan terms and how that rate follows the market.

What is the best term for a loan?

When picking a mortgage, it is important to pick out a loan term or payment schedule.

Usually, you will be offered a 15- or 30-year loan term, but it is not uncommon to see 10-, 20- or 40-year mortgages, according to CNET.

Mortgages can be fixed-rate or adjustable-rate. Interest rates in fixed-rate mortgages are set in stone for the duration of the loan.

Adjustable-rate mortgages only have interest rates set for a certain period of time before the rate adjusts annually based on the market.